With the Microsoft-Yahoo-Google (NSDQ: GOOG) dance so fluid, analyst reports are going stale pretty fast. Whereas just a couple days ago, most analysts were debating “what price” a deal would occur at, now they’re back to debating “if”.

Jeff Lindsay, Bernstein: “Yahoo!‘s (NSDQ: YHOO) proposed trial of search with Google is a shrewd move that could significantly complicate Microsoft’s (NSDQ: MSFT) unsolicited bid for Yahoo!” Lindsay argues that if the trial is successful, the path is paved for Yahoo to justify a $40 per share valuation. He also makes an important note about why Google is now willing to make this move, when previously it expressed concern over anti-trust issues. The difference is that at that time, Google’s DoubleClick acquisition hadn’t yet closed, and the company didn’t want to do anything to stoke the fears of regulators. Now that that’s out of the way, it can show a little more verve. Ultimately, the deal makes sense for Microsoft up to $35 per Yahoo share, but if the company is forced to go beyond that, then an offer makes less sense.

Ben Schachter, UBS: The Google deal doesn’t represent an alternative path, in Schachter’s view, but instead is a “pure negotiating tactic.” He also doesn’t expect any long-term agreement between Yahoo and Google to pass regulatory muster. However, Yahoo could still use the results of the test to argue that a combined Microsoft-Yahoo would offer more value, meaning Microsoft should raise its bid. “We continue to believe reaching a mutual agreement with Microsoft would be the best way for Yahoo! to potentially extract a higher bid; the alternative would be for Yahoo! shareholders to tender, although this process would not be as expeditious as if the two sides were to come to terms, and could involve a lower offer price, making the battle potentially even more protracted.” Lots more after the jump

Doug Anmuth, Lehman: In a report titled “This is Only A Test…”, Anmuth argues than an outsourcing deal with Google would lead to 34 percent growth in revenue per search (RPS), but that such a move would be a strategic error, as it “sacrifices L-T benefits of being a principal in both search & display for N-T financial gains.” As for the impact to Google, also an important question, given concerns over the company’s growth rate, not so much: “Incremental $190M in revs & $172M in EBITDA are increases of less than 2% for each on full yr ‘08 basis.” However, even if Yahoo and Google were to go full-on with this agreement, it doesn’t necessariy mean the decimation of Yahoo’s own ad team: “If Yahoo! were to ultimately outsource its search business to Google, we believe it could seek to maintain some degree of control around search sales on its site, potentially in a similar way to the AOL (NYSE: TWX) Marketplace which enables AOL to sell and customize Google’s search ads for marketers.” Overall, Anmuth thinks that search ad outsourcing would lead to a 5 percent total revenue jump, though with reduce costs, an EBITDA increase of 33 percent.

Note that none of these even get into the AOL and News Corp (NYSE: NWS). twists, though that will start to trickle in:

Rich Greenfield, Pali Capital:“MyHooSoft Sounds Far More Attractive than AolHoo” Even with the latest developments, Greenfield thinks Microsoft will win: “At the end of the day, MSFT has the balance sheet to bid virtually any price for YHOO and we simply cannot imagine them losing out to AOL, with potential stakes in Myspace (and Facebook) giving them significant insight into the world of social media and advertising.” Looking outside of Yahoo for a second, he adds: “Unclear where a MSFT/YHOO/Myspace combination would leave Facebook - but MSFT would certainly become a real “player” in today’s digital media landscape with a shot (however, long) of rivaling Google.”

Mark Mahaney and Brent Thill, Citi: “We Continue To Believe MSFT-YHOO Deal Is The Most Likely Outcome… and continue to believe that it will happen at a higher price than the initial $31 bid.” The entrance of AOL and News Corp. into the mix only increases the likelihood of a higher bid: “A combined News Corp-MSFT bid very likely means a higher bid for YHOO. An AOL-YHOO strategic deal that involves the repurchase of YHOO shares at a higher price than $31 very likely forces a higher bid for YHOO. And a full Google Search outsource deal - with over $1B in accretive cash flow - almost certainly forces a higher bid.”

Jaleel Patel, Deutsche Bank: He asks: “Yahoo!/AOL = Activision (NSDQ: ATVI) Part 2?” This is not just an analogy, as Patel offers an interesting theory from left field: Yahoo’s latest actions are possibly being spearheaded boardmember Bobby Kotick, CEO of Activision, which is engaged in its own, similarly structured deal with Vivendi. On the value of a deal with AOL, it’s trying to follow along: ” Once Yahoo! repurchases an estimated. $4.4bn in stock at $35/ shr. (per WSJ), the sharecount would fall to 1.7bn, or a market cap of $47.5bn at $28. Importantly, this would also imply 12x 2009 PF EBITDA of $3.2bn, vs. 10x for Internet media & 10% EBITDA growth. We arrive at $3.2bn in EBITDA based on AOL ad revs of $3.2bn in 2009 & a 40% EBITDA margin, + our $1.9bn EBITDA est. for Yahoo! At 10x EBITDA the PF share price would be $24 (1 mult. point = $2).” Finally, Patel suspects that regulatory hurdles, related to both search ads, IM and other areas, will prove to be an issue.

Ben Schachter, UBS: Another report form Schachter, this time with some reflection on the latest news. Basically, on Yahoo/AOL, it looks unlikely: “In our view Yahoo! management would have a difficult time convincing a majority of its shareholders this deal is worth more than Microsoft’s offer. Even if shares were repurchased at $35+/share, the shares likely would pull back once the buyback is done.” He adds that outsourcing search to Google would represent a 180 from management’s argument that search and display are synergistic. And on MSFT-NWS, he doesn’t see the rationale, noting that Microsoft doesn’t need a partner to finance the deal, and that getting News Corp. into the mix would significantly add to the integration risk. It’s not much of a stretch to believe the latter.

• Google-Yahoo Ad Test: A Gimmick To Thwart Microsoft—Or Simply Surrender?
• Microsoft and News Corp in Talks on Joint Bid For Yahoo; Possible Higher Bid; MSN+YHOO+MySpace
• Yahoo-AOL: Will It Happen Finally? In Advanced Talks on Combining
• Microsoft On Google-Yahoo Tie-Up: Google To Have 90 Percent Of Ad Market; Market Less Competitive